The Cyprus economy is projected to grow modestly during the years 2017 and 2018, according to the International Monetary Fund (IMF), aligning its projections for the next two years with the corresponding evaluations of the European Commission.
The IMF’s World Economic Outlook report for April 2017 reported that after a real GDP growth rate of 2.8% in 2016, the IMF estimates that the growth rate will drop slightly to 2.5% in 2017 and to 2.3% in 2018. Similar estimates were presented by the Commission in February 2017.
Inflation is showing a positive trend, reaching 1.5% in 2017 and 1.4% in 2018.
Unemployment will drop from 12.9% in 2016 to 11.3% this year, according to the IMF, and is set to drop to 10.2% in 2019.
Global economic activity is picking up with a long-awaited cyclical recovery in investment, manufacturing, and trade, according to Chapter 1 of the latest World Economic Outlook. World growth is expected to rise from 3.1% in 2016 to 3.5% in 2017 and 3.6% in 2018. Stronger activity, expectations of more robust global demand, reduced deflationary pressures, and optimistic financial markets are all upside developments, says the report.
“But structural impediments to a stronger recovery and a balance of risks that remains tilted to the downside, especially over the medium term, remain important challenges”, the report said.